Dec 26, 2023 - Economy

How store returns are changing with new options and return fees

Illustration of a holiday gift in the shape of a return arrow

Illustration: Sarah Grillo/Axios

There's new hope for avoiding the dreaded holiday return line — you can complete some of your returns without getting out of the car or leaving the house.

Why it matters: At a time when some retailers have added return fees or surcharges, others have rolled out convenient options to make returns easier.

The big picture: Returns can cost consumers big money if they forget to send products back or miss return deadlines.

  • Returns also accounted for $816 billion in lost sales, or 18% of total sales in 2022, up from 11% in 2020, according to the National Retail Federation.

Free returns by mail fading away

Reality check: The pandemic-induced online shopping bonanza forced retailers to adopt lenient return policies that cost them dearly.

  • Free returns by mail have been increasingly disappearing as retailers get fed up with paying for and processing mailed returns.
  • Earlier this year, Amazon started charging a $1 fee for some returns at UPS stores.

By the numbers: Loop, a returns management company, found that 43% of returns processed from Black Friday and Cyber Monday purchases had a return fee, up almost 8% from last year.

  • 90% of brands on the Swap returns platform are charging for returns, co-founder Sam Atkinson said.

Target, Walmart, Uber introduce new return options

What's happening: Target and Walmart now both offer curbside returns and Walmart+ members can get returns picked up from home for free.

  • Uber launched a returns service in October where drivers pick up returns and drop off returns at UPS, FedEx or the post office.
  • Happy Returns, which UPS acquired from PayPal in October, accepts "box-free, label-free returns" at more than 9,000 locations, including Ulta Beauty, Staples and Petco stores.
  • FedEx Consolidated Returns launched in early 2023 and accepts drop-off returns without a box or label at 2,000 FedEx Office, FedEx Ship Centers and Walgreens stores.
  • Amazon offers free returns at Whole Foods Market locations, Amazon stores, Kohl's and Staples locations and is now testing returns at Petco.

Yes, but: Don't expect to be able to be able to complete all returns curbside or box-free.

  • Most of the services are designed for shoppers who placed the orders and not every item is eligible for return through one of the newer methods.

What they're saying: "As customer perks dwindle, free returns will become a higher priority amongst customers, especially if they are painless, as in the case of Target," Swap's Atkinson told Axios.

  • Loop CEO Jonathan Poma said that while some are charging fees, other retailers are "incentivizing consumers with convenient post-purchase options."

What we're watching: Uber told Axios that the "Return a Package trips" saw an 80% increase the week following Black Friday.

Returns test

Our thought bubble: Before Christmas, Axios tested Target Drive Up returns and Walmart's curbside and at-home returns.

  • Both curbside returns options were easy, processed quickly and the driver picking up the at-home Walmart return came exactly when the return window chosen started.
  • Confirmation of the Target and Walmart refunds came within minutes.

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